This week, a federal Judge issued a great ruling for consumers in a putative class action involving certain Nissan Pathfinders and Infiniti QX60s which is currently pending in the United States District Court for the Southern District of Florida. The plaintiffs in that action, styled Batista, et al. v. Nissan North America, Inc., Case No.: 14-24728, allege that the continuously variable transmissions (“CVTs”) equipped in 2013-2014 Nissan Pathfinders and 2014 Infiniti QX60s contain a critical safety defect which can cause the vehicles to violently shake and fail to properly accelerate—a dangerous situation which can increase the risk of a crash, particularly if the vehicle were to fail to accelerate through an intersection or while merging into traffic.
The Magistrate Judge overseeing discovery in the Pathfinder litigation recently ordered Nissan North America (“NNA”) to produce documents in the physical possession of its parent and sister companies, including responsive documents in the possession of: (1) Nissan Motor Co., Ltd. (“NML”), the Japanese parent company of NNA; and (2) JATCO Ltd., the Japanese sister company of NNA which supplied the CVTs at issue. NNA objected to the Magistrate Judge’s ruling, which prompted a review by the District Court Judge presiding over the litigation.
The District Court Judge overruled NNA’s objection in this week’s Order. In doing so, the Court applied the three pertinent factors for determining when a party has control over the documents in the possession of a non-party affiliate company, as described in Costa v. Kerzner Intern. Resorts, Inc., 277 F.R.D. 468 (S.D. Fla. 2011). The Costa factors require the Court to analyze: (1) the corporate structure of the party and the non-party affiliate companies; (2) the non-party’s connection to the transaction at issue; and (3) the degree to which the non-party benefits from the outcome of the litigation. Id. at 471.
Applying the Costa factors, the Court observed that all three companies have a “close working relationship on the common transaction at issue,” because “they collectively designed, manufactured, and assembled defective CVTSs in the vehicles at issue . . . .” Batista, et al. v. Nissan North America, Inc., Case No.: 14-24728, D.E. 62, p. 3. The Court further observed that “NNA admits that its sales account for a significant portion of NML’s sales,” that NNA did not dispute the plaintiff’s contention “that the CVT defect has ‘pinched’ or ‘cut into’ NML’s profits,” and that “the parties agree that NML may ultimately be responsible for damages to the class . . . .” Id. at 4. Finally, the Court rejected NNA’s arguments based upon “case law from other jurisdictions that may require something beyond consideration of the three Costa factors,” explaining that “the Magistrate Judge was under no obligation to apply a heightened standard to determine control.” Id.
Click here to download a copy of the Court’s Order Overruling NNA’s Objections. We will continue to monitor and report on important updates in the Nissan Pathfinder litigation as Newsome Melton , along with two other firms, represents the plaintiffs in that action.